Record $5.6 billion revenue surplus will be given back to taxpayers as a credit on their 2023 state income tax returns
As an Oregon taxpayer, you may be in line for a much-larger-than-usual state tax refund in 2024.
Thanks to a record $5.6 billion revenue surplus, the state of Oregon will apply a credit, called a “kicker,” to taxpayers’ 2023 state income tax returns. You’re eligible for the kicker if you filed a 2022 tax return and owed tax before credits. (If you haven’t filed for 2022 yet, be sure to send that one in before filing your 2023 return.)
Depending on your tax liability from 2022, this refund could be substantial. (Use the What’s My Kicker? Calculator to get an idea of how much you’ll receive.) Here are just a few ways you can put your kicker to good use that will benefit you in the short and long run.
Get rid of that debt
If your kicker winds up being enough to wipe out high-interest debt, doing so would allow you to get back to saving for the long term. Even if it isn’t enough to eliminate the debt, this money could give you a head start on your debt-reduction strategy. These two methods are a good place to start:
- Debt snowball/debt avalanche. With these methods, you focus on paying off one debt at a time—either by working your way up to the largest debt or working your way down from the highest interest rate.
- Consolidating with a HELOC. If you’re a homeowner, you could roll your debt into a SELCO home equity line of credit (HELOC) and make one payment, at a lower interest rate, over a set period of time.
Save, save, save
Filling your savings buckets with a lump-sum kicker is a great way to get closer to your financial goals. With its exceptional annual percentage yield (APY), SELCO’s Cultivate savings account is the perfect place to set up the following:
- Emergency fund. Set aside 3–6 months’ worth of living expenses to cover the surprises life throws your way.
- Rainy-day fund. This pool of savings can be used to pay for unexpected expenses, like car repairs or replacing appliances.
Set it and forget it
SELCO’s certificate rates remain among the best around, so you may consider opening a certificate. With a minimum deposit of $500, you can set and forget your kicker refund and watch the money grow for up to seven years. In addition, qualifying members can earn an extra 0.25% or 0.50% with our Certificate Rewards.
Think about retirement
Is your retirement plan on track? Haven’t started planning yet? Give your retirement accounts a jumpstart (or set up new accounts) by kicking in your kicker. Retirement accounts are built to grow exponentially over several years, so a nice surprise like a kicker can be a major boon to your savings. If you weren’t able to contribute the maximum amount to an IRA or 401K, for example, you could also use this money for catch-up contributions in 2024. If you have investment questions, our CFS* Financial Advisors are always available to help.
Speed up your loan payoff
Over the life of any loan—vehicle, mortgage, personal—a good chunk of interest can accrue. The quicker you can pay down the principal, the less interest will be applied. Using your kicker to make a principal-only payment (or spreading it out over several principal payments) won’t reduce your monthly payment amount, but it can shorten the length of your repayment term.
There is so much you can do when money you weren’t expecting lands in your lap. Before the tax kicker is kicked back to you, take stock of your situation, weigh your options, then decide what’s best for you and future you.
*Nondeposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Nondeposit investment products offered through CFS are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. SELCO Community Credit Union has contracted with CFS to make nondeposit investment products and services available to credit union members.